Obama Drops Plan to Raise Taxes on 529 Savings Plans

January 28, 2015

The White House said Tuesday that it was abandoning its proposal to get rid of the tax benefits for 529 college savings plans, according to The New York Times.

Conservatives had widely criticized the plan, which would have rolled back a tax exemption for the earnings on money that families invest in 529 plans. But The Times reported that top Democrats in recent days also pressed the White House to drop it.

Administration officials had initially defended the plan as an attempt to redirect tax benefits that they said largely benefit wealthy families toward tax credits that help poorer families. The administration will keep its plan to expand other higher education tax breaks, a White House official told The Times.

Obama's full budget request to Congress is due out next week. 

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